Suggested Citation:
Ramea, Kalai, David S. Bunch, Christopher Yang, Sonia Yeh, Joan M. Ogden (2018) Integration of Behavioral Effects from Vehicle Choice Models into Long-Term Energy Systems Optimization Models. Energy Economics 74, 663 - 676

Long-term energy systems models have been used extensively in energy planning and climate policy analysis. However, specifically in energy systems optimization models, heterogeneity of consumer preferences for competing energy technologies (e.g., vehicles), has not been adequately represented, leading to behaviorally unrealistic modeling results. This can lead to policy analysis results that are viewed by stakeholders as clearly deficient. This paper shows how heterogeneous consumer behavioral effects can be introduced into these models in the form of perceived disutility costs, to more realistically capture consumer choice in making technology purchase decisions. We developed a novel methodology that incorporates the theory of a classic consumer choice model into a commonly used long-term energy systems modeling framework using a case study of light-duty vehicles. A diverse set of consumer segments (thirty-six) is created to represent observable, identifiable differences in factors such as annual driving distances and attitude towards risks of new technology. Non-monetary or “disutility” costs associated with these factors are introduced to capture the differences in preferences across consumer segments for various technologies. We also create clones within each consumer segment to capture randomly distributed unobservable differences in preferences. We provide and review results for a specific example that includes external factors such as recharging/refueling station availability, battery size of electric vehicles, recharging time and perceived technology risks. Although the example is for light-duty vehicles in the US using a specific modeling system, this approach can be implemented more broadly to model the adoption of consumer technologies in other sectors or regions in similar energy systems modeling frameworks.

Key words: energy systems, consumers